RETAIL SALES UNEXPECTEDLY TUMBLE 0.4%

Total sales unexpectedly
fell 0.4% in January from the previous month, and December's
0.2% advance was revised down to a 0.1% drop. Economists were
looking for no change from December.

Excluding autos, sales were flat, slightly below estimates for a
0.1% advance. December's 0.7% gain was revised down to 0.3%.

Excluding both autos and gas, sales were down 0.2%, below
estimates for a 0.1% rise, and December's 0.6% gain was revised
down to 0.1%.

The retail sales control group, which feeds into the calculation
of GDP, fell 0.3%, below expectations for a 0.2% rise. The
December retail sales control group gain was revised down to 0.3%
from 0.7%.

"This report was quite weak, and the disappointing
performance among components that depend on foot traffic such as
sales at auto dealers, department stores, and at restaurants
suggests that the weakness may be due in part to the unusually
cold conditions," says Millan Mulraine, deputy head of U.S.
research and strategy at TD Securities.

"However, with online sales also dipping, after steady
growth during the previous four months, there may be some
indication that other factors beyond the usual weather effect
suspect may be at play. That said, the big downward revision to
core consumer spending in December does provide some downside
risks to our expectation for a downgrade to Q4 GDP estimate to
2.8%, from 3.2%."